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16th February 2017
NEMO Settlement and Banking Information Session
1
2
Agenda
Timing Topic Speakers
10:30 10:35 Introduction Robert Mc Carthy
10:35 12:30 ECC Settlement & Clearing Overview Susann Just-Marx
12:30 13:30 Lunch & Networking All
13:30 13:45 Unicredit Banking Overview Tomas Trsek
13:45 14:00 Keler Banking Overview Sndor Szalai
14:00 14:15 Wrap up/Next Steps All
14:15 15:00 Questions and Answers All
European Commodity Clearing AG
NEMO Settlement & Banking
Information Session
16 February 2017
Agenda
1. Morning session
1) Membership Options and Registration Process at ECC
2) Risk Management: Limits, Margins, Collateral
3) Daily activities: Financial and Physical Settlement
4) ECC Systems and Reporting Functionalities
5) Q&A
2. Networking Lunch Break
3. Afternoon session
1) Presentation of Banking Organizations
2) Q&A
4
Introduction Overview EEX Group and ECC
Part
ner
Exchan
ges
Cle
aring
House
EEX operates transparent markets for energy and commodity products. At EEX, contracts on Power,
Emission Allowances, Coal as well as Freight and Agricultural Products are traded or registered for
clearing. Alongside EEX, EPEX SPOT, Powernext, Cleartrade Exchange (CLTX), PXE, Gaspoint Nordic
and CEGH are also part of EEX Group.
Clearing and settlement of trading transactions are provided by the integrated clearing house European
Commodity Clearing (ECC). ECC also provides clearing services for SEEPEX, HUPX and NOREXCO.
5
Clearing Member SEMOpx
(Business) Transaction
(Business) Takeover Nomination/Delivery
SEMO
Trading
Participant 1
2
Collection of securities
Payments
Guarantee function
3
4
Nomination/Delivery 4
Membership Options Non-Clearing Member Model
Non-
Clearing
Agreement
Non-
Clearing
Agreement
Irish Power Market (Spot Only at the moment):
Clearing Members act as guarantor and payment agent for all trades concluded on the
Spot Market. They collect margins and all payments from their clients (trading participants).
6
Settlement
Bank SEMOpx
(Business) Transaction
(Business) Takeover Nomination/Delivery
SEMO
Trading
Participant 1
2
Payments 3
4
Nomination/Delivery 4
Membership Options Direct Clearing Participant / Settlement Bank Model
Irish Power Market (Spot Only at the moment):
Settlement Banks act as payment agents for all trades on the Spot Markets, e.g. provide
accounts which can be used for all payments necessary for buying/selling power at the spot
market. All trades of the Trading Participant need to be prefunded.
Direct
Relationship
with ECC
3
Bilateral
Agreement Bilateral
Agreement
7
Membership Options Comparison of different Membership Models
Non-Clearing Member Direct Clearing Participant
Markets All markets Spot &
Derivatives Spot only
Bank Clearing Member (CM) Settlement Bank (SB)
Guarantee function Yes, Clearing Member No
Limit Voluntary,
Set by Clearing Member
Mandatory,
Set by ECC based on collateral &
credit limit set by ECC
Prefunding
No collateralization towards
ECC but potentially towards
the CM
Collateralization of pre-trade limit in
advance with collateral accepted by
ECC
Collateral Collected by CM, dependent
on by CM accepted collateral
Deposited by DCP,
only ECC-accepted collateral
Default Fund
Contribution Clearing Member obligation DCP obligation
Margining Yes, IMSM and CESM No, neither IMSM nor CESM
8
Membership Options Requirements
9
Non-Clearing Member Direct Clearing Participant
Passing ECCs KYC assessment
Balancing Agreement with SEMO
Approved as a Trading Participant at the Exchange
Agreement with Clearing Member and ECC Agreement with Settlement Bank
Defined by Clearing Member
Country of origin approved by ECC for
Direct Clearing Participants
Contribution to Clearing Fund depending on
trading limit
Deposit of Collateral
Minimum equity of 50k
or support by guarantee of parent company
Membership Options Comparison of Membership Models
Fees are settled via a DCPs Settlement Bank or a NCMs Clearing Member.
10
Non-Clearing Member Direct Clearing Participant
Exch
an
ge
Exchange Level Annual Fee & Variable Transaction Fee
to be determined
EC
C
Variable Fees
ECC Clearing Fees for spot market:
0.7 EUR-Cent/MWh for all transactions,
both Day-Ahead and Intraday
Annual Fee None but variable fees of at least
1,000 EUR
12,500 for all spot markets
9,000 / 6,000 for single
market
(e.g. Irish Spot Market)
Expenses for cash respective negative interest rate on cash collateral
Limit Adjustment Fee depending on CM 100 / 70 per limit /collateral
adjustment
Ba
nk
Bank Fees Individual Bank fees depending on bank and model
Contact a Settlement Bank or Clearing Member
Submit admission forms to ECC
ECC reviews admission documents
Technical setup of trading and clearing systems
Admission as Direct Clearing Participant or
Non-Clearing Member
1
5
2
3
4
Registration Process ECC Admission Process
11
Deadline ECC documentation package:
7 Aug 2017 (to be ready for Market Trial starting Dec 2017)
Registration Process Clearing Members & Settlement Banks Network
February 2017
2
11 1
2
1
2
1 1
2
23 Clearing Member ABN AMRO Clearing Bank N.V.
Banca Akros SpA
Banca Popolare di Sondrio SCPA
Banco Santander, S.A.
Bayerische Landesbank
BNP Paribas Commodity Futures Ltd.
Citigroup Global Markets
ED&F Man Capital Markets Limited
Goldman Sachs International
INTL FCStone LTD
J.P. Morgan Securities plc.
KELER CCP Ltd.
Macquarie Bank International
Marex Financial Limited
Merrill Lynch International
Morgan Stanley & Co. International plc
Nordea Bank AB, Frankfurt Branch
Oesterreichische Kontrollbank AG
Raiffeisenbank a.s.
Renta 4 Banco
Societe Generale Newedge UK Limited
UBS AG
UniCredit Bank Czech Republic and
Slovakia, a.s.
1 Settlement Bank ABN Amro Bank N.V.
1
12
Registration Process Application Forms
Non-Clearing Member* Direct Clearing Participant
KYC
Sca
n
KNOW YOUR CUSTOMER QUESTIONNAIRE
Specific
Forms Orig
inal NCM01 ADMISSION AS NON-
CLEARING MEMBER
NCM02 NCM AGREEMENT
DCP 01 ADMISSION AS DCP- CLEARING MEMBER
O09 LIMIT ADJUSTMENT FORM
O10 CASH COLLATERAL FORM AGREEMENT WITH SETTLEMENT BANK
TP Forms
Sca
n
TP_SEMO_01a POSSIBILITY TO FULFILL TRADES PHYSICALLY or
TP_SEMO_01b POSSIBILITY TO FULFILL TRADES PHYSICALLY WHILE USING A THIRD PARTY
T07 VAT DETAILS
T10 SETUP/ MODIFICATION / DELETION OF USER-IDs not mandatory Technical
forms
Supplementar
y forms
CERTIFICATE OF COMPANY REGISTER
PROOF OF SIGNATURES
ANNUAL REPORT
*reduced scope for existing NCMs 13
Deadline ECC documentation package:
7 Aug 2017 (for Market Trial starting Dec 2017)
14
Membership Options NCM Direct: Overview
NCM Direct is a variation of the existing NCM membership model offered by ECC in order to
make use of the risk management measures that are implemented in the context of DCPs.
It is to be constructed for the spot markets only.
The main features of the service are:
Pre-trade limit system that NCMD can only trade up to an allocated trading limit
that has to be fully collateralized in advance.
ECC will refrain from calling IMSM or CESM requirements.
ECC manages the collateral which is passed-through by the Clearing Member.
The Clearing Member still guarantees for all exposures of the NCM Direct
participants.
The NCM Direct model is in the
design phase at ECC; no firm go-live
date possible at this stage
Membership Options Comparison of Models
Non-Clearing Member Direct Clearing Participant
Normal NCM NCM Direct
Markets All markets Spot &
Derivatives Spot only Spot only
Bank Clearing Member (CM) Clearing Member (CM) Settlement Bank (SB)
Guarantee
function of Bank Yes, Clearing Member Yes, Clearing Member No
Limit Voluntary, Set by Clearing Member
Mandatory, Set by ECC based on collateral &
credit limit set by Clearing Member
Mandatory, Set by ECC based on collateral & credit
limit set by ECC
Prefunding
No collateralization
towards ECC but
potentially towards the
CM
Collateralization of pre-trade
limit in advance with collateral
accepted by ECC
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